The Supply Chain Operations Reference (SCOR) model is used by many companies today. However, its final two stages of Delivery and Return can be quite vulnerable to an unexpected yet nearly uncontrollable factors: The local courier.
This is why today’s most competent supply chain managers should consider extending their visibility beyond those within their company or even beyond their immediate network of suppliers and manufacturers. There is little value gained from an inward focus just so you can reduce the cost of logistics partners.
By extending your visibility, you are doing your business a favor by facing an uncomfortable reality about local couriers (instead of shying away from it). It is painful to admit, but not all countries are equal when it comes to the integrity of their public postal delivery services (or indeed any transport courier service operating behind a middleman).
Some have ridiculously subpar infrastructure that’s swollen and stifled with red tape. Others utilize transport that wouldn’t be considered roadworthy in any other state or country. There are even those who refuse to touch your transport management system, citing dubious reasons why you can only comply with theirs.
Yet what is most vexing of all is that novice managers generally find themselves with little choice but to employ the services of such unscrupulous middlemen.
All the while, your customer suffers the wait as they wonder why the supposed five-to-seven day delivery has somehow stretched to three whole weeks and counting. And as the days stretch on, it increases of the chances of damage to the product and/or its packaging and drastically reducing its sale-ability!
Some might argue that such circumstances offer them no control and that customers might have to just consider more express forms of delivery by default. While there is merit in that logic, you still wouldn’t endure this problem so badly if you had higher visibility across the entirety of your supply chain (as opposed to just its innermost operations). Consider what would have happened instead had you taken steps to further the reach of visibility to include more logistics and third parties.
- You would have known better options.
It’s incredible to think that there are people who take a look at their country’s transport infrastructure and delivery systems then presume that everyone else is the same!
Merely checking if a country has a public postal service or indeed any transport service is already a sign that low visibility creeping in. Had you taken some time for due diligence research, you would have found just a few more options that are considered reliable by other international shippers and suppliers also working in these same localities.
- More appropriate pricing models could have been considered beforehand.
Remember, appealing to customers with a free or low-cost shipping option always comes with the risk of dealing with poor or just plain unscrupulous couriers. Visibility allows you to better weigh the price of alternatives, thereby resulting in more valuable offers to your target market and also better options for your third party suppliers.
- More safeguards against losses would have been set up.
The Return stage of the SCOR model often involves finding ways to compensate for any losses incurred by the customer (such as defective or damaged products, refunds, reverse logistics, etc). With higher visibility, you can at least flag regions with unreliable couriers and anticipate the worst, incorporating appropriate safeguards, without loss of value (and in some instances, even cash)!
- Insight to better logistics.
Lastly, sometimes you might even find that some couriers in the region are not only reliable but also innovative. (For example, look at how Amazon’s newly released Scout is opening last-mile logistics possibilities for other U.S. couriers). Raising your visibility can put you in a better position to take advantage of such innovations and learn more about how you may even employ them directly.
When taking your supply chain global, most leaders tend to have a feeble reaction to the challenges of international logistics. They treat it as nothing more than normal ‘growth pains’ when in reality, they are just not paying enough attention.
Stay focused on increasing visibility beyond the internal because unexpected middlemen and other liabilities will find ways to distract and disrupt you, taking your time and attention away from those other high value adding projects and wasting potential life changing opportunities!